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With the "Copyright Alert System" going into operation over the next few months, major American ISPs will start sending out "strikes" to users accused of infringing copyrights online. Sean Flaim, who has just completed extensive research on the topic, argues that the system has real benefits—but it needs close supervision. The opinions expressed here do not necessarily represent those of Ars Technica.

Eight months ago, content owners and Internet service providers (ISPs) agreed to the Copyright Alert System, a "six-strike" plan to reduce copyright infringement by Internet users. Under the system, ISPs will soon send educational alerts, hijack browsers, and perhaps even slow/temporarily block the Internet service of users accused of online infringement (as identified by content owners). At the time it was announced, some speculated that the proposed system might not be legal under the antitrust laws. Were they right?

Recently, I completed a draft research paper where I explored the potential antitrust aspects of "six strikes" even further. There, I concluded that while the system has some promise for reducing online infringement, its private nature, combined with a lack of government oversight, raises significant antitrust concerns. It will require careful monitoring by regulators.

Power plays

Just what is antitrust law? If I had to explain antitrust in a single word, it would not be "competition"—it would be "power." The power to raise prices above a competitive level; the power to punish people who break your rules. Such power is something society usually vests in government. Antitrust law is in part concerned with private industry attempting to assert government-like power.

In a democratic society, people can exert some control over government power at the ballot box. Private power cannot be controlled with the same sort of vote. Rather, private power only responds to consumer choice in the marketplace. When the marketplace fails to function correctly and lacks competitive pressure, nothing keeps companies from exerting private power in ways that benefit them. This hurts consumers overall.

The Copyright Alert System represents a raw exercise of concerted private power. Content owners as a group have control over their product. They have leveraged this control to forge this agreement with ISPs, who need to work with content owners in order to offer content to their own users. ISPs, in turn, have power over us as users. When was the last time you looked into alternatives to your home Internet service? If you are like people in 75 percent of this country, only one truly high-speed broadband alternative will soon be available—your local cable television company. In most locations, that company has agreed to participate in the Copyright Alert System.

Given that Internet companies have the power to determine how—and whether—consumers can access the Internet, this makes the Copyright Alert System even more problematic. The proposed system flips copyright on its head. In a normal copyright infringement claim, the copyright owner must first identify the alleged infringer and then sue them in court. Once there, the owner must prove that the alleged infringer downloaded, shared, or publicly performed a work without authorization.

Not so in the Copyright Alert System. If a consumer gets to the point where an ISP is going to take an action, the consumer is given the option of participating in a private "due process" proceeding, provided they have $35 to spare. In the proceeding, the content owner is presumed to have both identified the copyrighted work correctly and correctly identified the alleged infringer. The burden of proof is on the consumer to prove them wrong. And the alleged infringer is even limited in the ways they can attempt to do that. In essence, the Copyright Alert System is an effort to privately rewrite copyright law to make an accused liable for infringement until proven innocent.

What justifications do companies offer for taking these actions? For one, the companies assert the overall economic costs of piracy are too high. Yet when making these claims, they continue to assert fuzzy numbers which have not held up to any serious scrutiny.

Further, implementing the Copyright Alert System is not "free" by any means. Investigators need to detect infringement, rightsholder need to oversee their investigators, and the ISPs need to implement a tracking and punishment system for users. Estimates range from $4 to $32 per notification sent, and those costs are not borne by the person receiving the notice. They are paid for by all of us, in the form of higher prices for both content and Internet service. In essence, the system places a tax on Internet service designed to benefit content owners without any corresponding benefit for the vast majority of consumers.

Another justification the parties have given: the educational nature of the Copyright Alert System is preferable to the coercive nature of copyright infringement litigation. This is a valid point. The merits of such an arrangement, however, are directly related to whether a person has been accurately identified as an infringer. So far, content owners have not always acted in a fashion that instills confidence they can correctly identify infringing users or works at scale. That's extremely problematic when creating a system which presumes that identifications are correct, and that forces consumers to prove that they are not.

Is "less government" a good thing?

This isn't to say that the Copyright Alert System is necessarily a bad idea, in general. It is possible—even probable—that educational alerts will both reduce piracy and keep consumers out of federal court for minor charges.

But the issue is the complete exclusion of the government from involvement; though the White House helped broker the deal, government power—and therefore democratic accountability and judicial oversight— are absent. Everyone agrees something needs to be done to lower the cost of copyright enforcement, but copyright is still a right that originates from the government. Ultimately that is where any relief for content owners should begin.

In her recent book, Consent of the Networked (read our review), author Rebecca MacKinnon discusses how many consumers are now residents of "Facebookistan" and "Googledom," reminding us of the power these two companies hold over consumers. But this power pales in comparison to the power exercised over consumers by their local ISPs, which control the very pipes that connect people to Google and Facebook.

Congress is the body that writes laws affecting interstate commerce. Antitrust, at least in part, offers protection against private companies doing the same. Recent reports indicate that the alert system, until now off to a slow start, will soon start affecting Internet users. Once it does, regulators must look closely to make sure the system lives up to its main promise as an educational tool rather than a system of vigilante justice.

Sean Flaim is a recent graduate from the Catholic University of America, Columbus School of Law, where he specialized in antitrust, intellectual property, and communications law and policy.

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133 Reader Comments

I might agree to something like this, only if the accusing companies have a similar "six strikes" system, where if they accuse people wrongly they get a strike against them, and after six they are temporarily suspended from the internet for a year.

If a consumer gets to the point where an ISP is going to take an action, the consumer is given the option of participating in a private "due process" proceeding, provided they have $35 to spare. In the proceeding, the content owner is presumed to have both identified the copyrighted work correctly and correctly identified the alleged infringer. The burden of proof is on the consumer to prove them wrong. And the alleged infringer is even limited in the ways they can attempt to do that. In essence, the Copyright Alert System is an effort to privately rewrite copyright law to make an accused liable for infringement until proven innocent.

Sounds almost exactly like NZ version of Copyright Tribunal. Except NZ is 4 strikes only.

I might agree to something like this, only if the accusing companies have a similar "six strikes" system, where if they accuse people wrongly they get a strike against them, and after six they are temporarily suspended from the internet for a year.

I might agree to something like this, only if the accusing companies have a similar "six strikes" system, where if they accuse people wrongly they get a strike against them, and after six they are temporarily suspended from the internet for a year.

do you really think that's feasible?.

Possibly not, but a system should be implemented where a company that repeatedly made incorrect or false claims would be suspended from the programme, unable to make further claims for a period of time.

Putting so much power into the hands of the media companies without any system to limit abuses of that power is almost guaranteed to fail. This system depends on the companies involved behaving themselves, but their history of using the courts doesn't give me great hope that they will.

So my ISP will start actively "monitoring" my actions on the internet at the behest of a 3rd party AND I will be presumed guilty AND I will have to PAY for due process. Stomp on citizen's rights much?

I am a customer of so many of the companies that are pushing the implementation of this shit. Do they have any fucking idea how bad they're treating their "customers"?

I'm nearly ready to swear off going to any movies ever again. Note to Hollywood: I really like your products, I hate, hate, hate, hate your corporations. Eventually it'll be too much to take and I'm going to turn my back on you forever. Forget lost profits, I'll let you settle for NO profits. Stop this crap, now! The SOPA backlash was not a one time event and we don't need to find compromise laws to implement, we need to wipe out these ridiculous IP laws going all the way back to DMCA.

Oh, and note to self: use TOR for all internet communications when this crap gets turned on.

But, but... they're corporations and can do anything they want so long as it's in the TOS or EULA! And if people don't like it they can just not buy it!

Or at least, that's what I hear on Ars every time I object to some corporate action.

I'd like to think you can see the difference between (say) boycotting all RIAA/MPAA products, and being flagged by the RIAA/MPAA for doing something that you may or may not have done, and then having to pay money to go through a process to clear your name.

I often post to tell people to boycott products completely to reduce demand. I also note the number of false accusations made by the media companies over the years and so don't think there's an issue of consistency in calling this system a bad system in need of independent oversight at the very least.

But, but... they're corporations and can do anything they want so long as it's in the TOS or EULA!

Your sarcasm is not lost on me. This is, of course, false.

microlith wrote:

And if people don't like it they can just not buy it!

Well, that IS true, but I also agree with your underlying sentiment. These companies should not be above our complaints, regardless of whether our involvement with them is optional. After all, you could also say if you don't like the US Gov't you could move to a different country. I'm not going to do that either. Sticking with the analogy, starting up your own ISP to avoid the harassment these companies push is (in scale) akin to founding your own country to avoid your current government's manipulative tactics.

In 20 Years there will be history teachers teaching students this was the start of the end of "Innocent tell Proven Guilty". We are now walking, well actually been going down a slipper slope were we will loose much of our freedoms and rights.

Sticking with the analogy, starting up your own ISP to avoid the harassment these companies push is (in scale) akin to founding your own country to avoid your current government's manipulative tactics.

The problem, I believe, is that they think of us not as customers (whose needs they want to satisfy) but as consumers (of whatever product they produce). As consumers, we are expected to line up at the trough, feed, and pay. What we *want* is...inconsequential.

Welcome to the United States of the Private Industry! After congress eventually realizes that they have lost control of corporations, maybe then they'll outlaw EULAs, TOSes, and revoke their citizenship and actually have the CONSTITUTION ENFORCED!

I might agree to something like this, only if the accusing companies have a similar "six strikes" system, where if they accuse people wrongly they get a strike against them, and after six they are temporarily suspended from the internet for a year.

do you really think that's feasible?.

Possibly not, but a system should be implemented where a company that repeatedly made incorrect or false claims would be suspended from the programme, unable to make further claims for a period of time.

Putting so much power into the hands of the media companies without any system to limit abuses of that power is almost guaranteed to fail. This system depends on the companies involved behaving themselves, but their history of using the courts doesn't give me great hope that they will.

Considering there is no governing body apart from the accuser, I doubt that anyone would be caught about abusing the system.

Welcome to the United States of the Private Industry! After congress eventually realizes that they have lost control of corporations, maybe then they'll outlaw EULAs, TOSes, and revoke their citizenship and actually have the CONSTITUTION ENFORCED!

Your American Citizenship; brought to you by Coca Cola. Ahhhh that refreshing taste!

What I think people forget is that the internet is mostly privately owned. You are paying for a private distribution service much like FedEX or UPS. Do you have the right to send anything via FedEX including bombs and drugs?

I doubt they'll even go after people who pirate a movie every other month. It won't be worth their time. They'll be going after the lame asses who are constantly downloading from p2p networks and think that owning pirated copies of every Ghost Rider movie makes them 'leet. I could care less if that crowd is hauled into court.

What I think people forget is that the internet is mostly privately owned.

Which is immaterial. Corporations should not be allowed to conspire against people in ways that deliberately leave them no recourse.

Quote:

You are paying for a private distribution service much like FedEX or UPS. Do you have the right to send anything via FedEX including bombs and drugs?

Which highlights how extra dumb this all is. Everything being discussed is already covered under existing laws. The media companies simply refuse to exercise the rights they have.

Quote:

I doubt they'll even go after people who pirate a movie every other month. It won't be worth their time. They'll be going after the lame asses who are constantly downloading from p2p networks and think that owning pirated copies of every Ghost Rider movie makes them 'leet. I could care less if that crowd is hauled into court.

I expect what will happen is that anyone on a torrent linked in a place that's publicly accessible will find themselves hit with a notice on a regular basis. The companies have shown in the past that they can and will blindly spray take down notices even when the content wasn't theirs or didn't even exist at all.

The important thing for them now is that you, the average person, will have zero recourse whatsoever. Even if the claims are false.

What I think people forget is that the internet is mostly privately owned. You are paying for a private distribution service much like FedEX or UPS. Do you have the right to send anything via FedEX including bombs and drugs?

FedEx and UPS don't have anything close to a monopoly, and their dominance is almost entirely attributable to efficiency and being well known. Parcel delivery has a low barrier to entry, while cable and phone networks have very high barriers to entry and often include municipal agreements to exclude competition.

Quote:

I doubt they'll even go after people who pirate a movie every other month. It won't be worth their time. They'll be going after the lame asses who are constantly downloading from p2p networks and think that owning pirated copies of every Ghost Rider movie makes them 'leet. I could care less if that crowd is hauled into court.

Apparently, you can't read. The one positive point made for this system was that this system might "keep consumers out of federal court for minor charges," which suggests that there will be no court cases. However, p2p court cases are for all practical purposes dead and will stay that way for the foreseeable future regardless of whether or not this system is in place, so it's no real benefit. That's not because the RIAA et al don't care anymore, but because it's horrible PR, they didn't get any significant amounts of money when they won (you can't get blood from a stone), and it racked up huge legal fees. If a behavior has no real benefit and tons of costs, that behavior is prone to stop.

This system, however, would make it trivial to spam ISPs with reports, and since only the last one is contestable and there is no apparent recourse for abuse, they have no real incentive to have any kind of accuracy.

The best thing that will come out of this bullshit is a slew of false positives that finally make it the problem of all the people who think this isn't their problem.

Yes and no. It will bring attention to the issue but it's so far-reaching and flawed, like SOPA was, that afterward those newly enlightened citizens will be ready to compromise... and even if we're ok with the resulting rules, we're still letting something other than our government make the rules. The future police state will not be ran by actual police enforcing actual laws but by private corporations enforcing their own laws. And someday, we won't know the difference.

Considering there is no governing body apart from the accuser, I doubt that anyone would be caught about abusing the system.

And that's why the system is so terrible. Without an independent body that's not beholden to the media companies, it's ripe for abuse.

superslav223 wrote:

I doubt they'll even go after people who pirate a movie every other month. It won't be worth their time. They'll be going after the lame asses who are constantly downloading from p2p networks and think that owning pirated copies of every Ghost Rider movie makes them 'leet. I could care less if that crowd is hauled into court.

Not worth their time? They'll automate the process so that they can click on a torrent, pull up a list of everyone up- or downloading and send out the notifications. Pressing a few buttons doesn't take a lot of time.And what happens if your IP is on the list in error? You'll be paying the fee to have your case reviewed, but will you be happy about the process then?

microlith wrote:

...

I missed your point earlier, and still don't quite see what you did in that post. Maybe I'm having a stupid moment.

The important thing for them now is that you, the average person, will have zero recourse whatsoever. Even if the claims are false.

LOL after what, 5 strikes? At which point your bandwidth might get capped? Poor baby.

I think the real scare is for people who pirate and don't want to stop. Anyone outside nerdland who finds out their neighbor was using their router to torrent will lock it down and that will be the only strike. It will be the idiot pirate who actually gets to 5 strikes and then goes on TEEVEE to tell everyone about how it wasn't him and the how MPAA is out to get an innocent person (cue word's tiniest violin).

Not worth their time? They'll automate the process so that they can click on a torrent, pull up a list of everyone up- or downloading and send out the notifications. Pressing a few buttons doesn't take a lot of time.And what happens if your IP is on the list in error? You'll be paying the fee to have your case reviewed, but will you be happy about the process then?

No they will not automate the process by flagging every IP since that would flood with ISPs with too many to deal with.

If your IP is on the list in error than that is only one strike. They have to allow a few accidental strikes for kids/open routers/etc. But as I said they won't be flagging over a single instance. They will likey go after P2P users who keep a dozen movies up 24/7. It's the uploaders that they want. I don't have a problem with that and after seeing how many rich students pirated everything in college I think some enforcement is needed. Movie companies do lose revenue to piracy which means less tax money for local governments. Piracy has become too casual and there needs to be more incentive for people who can afford the media but are just cheap and lazy.

The article here purports to tie the CAS to anti-trust law, but lacks any reference to recent cases. I looked over your link to your paper, and plenty was in there. The article is lacking without it, IMO.

You also alllude to the inherent monopoly of copyright. There's also the monopoly (or duopoly) of ISPs.

Given all that, from the logic you cite, I don't see how this would be in violation of anti-trust, because the collaborating parties aren't competitors: If Sony teams up with Comcast to spy on my traffic, and eventually block it, that isn't the same as say Sony & Universal, or Comcast and Time Warner Cable. So I don't see the conspiracy as analogous to the boycotts mentioned in your paper.

Furthermore, while you state that this is a conspiracy lacking government oversight, the telecommunications companies are some of the most regulated companies in the world: They have the FCC, FTC, various state PUCs, plus the cities they sign franchises with to deal with. There may be no direct judicial due process, but there are plenty of governmental organizations on the lookout. Also, how would CAS be different from signing away your rights to sue in lieu of binding arbitration?

Does not matter what or how the copyright owners reason this out.Its amazingly one sided, the scheme benefits the copyright holders YET every subscriber will be charged for the cost of protecting said copyright owners, why do we have to pay for this? Why take the costs out on us?Its like coming into my house, accuse me of stealing your stuff and even if you cant prove i stole anything, im still going to be charged via higher subscription costs whether i really stole anything or not.

Second who is going to decide that i am innocent or guilty? Is it the ISP or the copyright holders?

Thirldy as pointed out by the first poster machalel (bravo sir or mam)If they make mistakes which im sure they will claim they are more infallible than the pope (see where that got us) why are there no penalties being levied against them? Its all only on the accused subscriber.There are no checks or controls on the power that they have like they should be made responsible if they have wrongly accused someone and the privileges of the copyright owners should be suspended for a time so they wont be so trigger happy just issuing accusations right and left. They ahve to be real careful so that they will suffer consequences when they make mistakes.

No they will not automate the process by flagging every IP since that would flood with ISPs with too many to deal with.

That's not their problem, though, and not being their problem is precisely what's wrong with this system. They don't bear the costs, so there is no downside for them to abuse the system.

Quote:

If your IP is on the list in error than that is only one strike. They have to allow a few accidental strikes for kids/open routers/etc. But as I said they won't be flagging over a single instance.

Why wouldn't they flag over a single instance? In this system, flagging a user is about as easy as sending a DMCA notice, and this article notes that many rightsholders spammed DMCA notices without any oversight. Rightsholders have been given far too much power with far too little checks on said power. Giving them more in an extrajudicial manner is utter madness.

But the issue is the complete exclusion of the government from involvement; though the White House helped broker the deal, government power—and therefore democratic accountability and judicial oversight— are absent.

I'm actually guessing that this is by design, so that initially the content creators responsible can try and preclude "violators" from claiming that their 1st Amendment rights are bring violated. "But Your Honor, Congress has nothing to do with this, it's our poor little company that is bringing forth these charges. And there's no "law" involved here, either, just a "system". So we can put that Constipatution-whatchamacallit away, amirite?"

I say initially because it remains to be seen what will happen when there is an inevitable trial for damages.

Funny how the rights holders always seem to equate downloading as Theft, Yet they will not let the police handle it.

Imho, this is not about piracy anymore, this is about the media corporations getting more powerful. they effectively would have the power to shut down anything they want. (and considering their track record, they will use that power.)